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Paris Club Restructuring and the Rise of China
Governments in low and middle income countries access finance from an increasingly diverse set of creditors. These include not only private investors, but also new official creditors such as China and its state-influenced policy banks. We posit that Chinese lending disrupts established processes of debt renegotiation, especially that led by the Paris Club grouping of traditional official creditors. China’s presence as a lender reduces borrowing countries’ demand for Paris Club relief, while also reducing western governments’ willingness to offer such relief. […]